1. Field of the Invention
This invention relates generally to a system and method for providing inventory planning for a service parts supply chain, where inventory polices are established based on multi-echelon inventory planning optimization while using a performance monitor for measuring the performance of the supply chain, a supply chain visibility system for monitoring actual conditions of the supply chain and a feedback controller for adjusting the input of the inventory planning and recalibrate it based on the actual performance and conditions of the supply chain.
2. Discussion of the Related Art
OEMs (original equipment manufacturers) typically provide an after market parts supply to provide service vehicle parts for their vehicles. The service parts are ordered by and delivered to a dealer or a service shop that provides the parts to customers who wish their vehicles to be serviced. These parts typically follow a supply chain from the parts manufacturer to the vehicle owner.
FIG. 1 shows a typical after market parts supply chain (PSC) 10 to provide after market service parts. The PSC 10 includes a supplier network 12 where suppliers manufacture or distribute the parts. The parts are warehoused in parts distribution centers (PDC) 14, including parts processing centers (PPC), that are typically owned by the OEM for the vehicles it manufactures. The PDC/PPC 14 typically is in the multi-echelon structure and provides parts to a certain portion of the market. A plurality of dealers or other automotive shops would be part of a dealer network 16 that would order parts from the PDC/PPC 14. The dealer or vehicle shop in the network 16 would provide the parts and the vehicle service to customers 18 that own the vehicles.
It is critical for the OEM to provide the right quantity of the right parts at the right place at the right time to ensure customer satisfaction and loyalty. To accomplish these tasks, the OEM will employ an inventory planning model to effectively manage the inventory at PDC/PPC 14. The inventory planning model determines optimum inventory policy parameters based on predetermined inputs, such as order forecasts for dealers and end customers, nominal transit times, processing times, handling times, etc., for stocking the parts at the PDC/PPC 14. Depending on various inventory policies, inventory policy parameters include safety stock level, minimum and maximum inventory levels, inventory re-order points, order-up-to inventory level, etc.
Known inventory planning policies typically determine the optimal inventory policy parameters for the multi-echelon PSC 10 on a monthly basis based on the inputs. Further, known inventory planning models are typically executed into the operational level of the PSC 10 without a real visibility of the PSC 10, particularly, the actual supply chain conditions, such as inventory levels at the PDC/PPC 14 and the dealers, demand for the dealers and customers, transit time from one location to another in the PSC 10, etc. However, it is very important to be able to track the actual condition as it often changes as a result of supply chain uncertainties, such as customer needs, parts usage life, transportation conditions, weather, etc. Moreover, the actual effectiveness of the PSC 10 is not explicitly monitored to measure the goodness of inventory planning. Therefore, improvements can be made in the inventory planning model to help better manage the parts supply chain and insure customer satisfaction and loyalty.